Hearings to examine the Patent Eligibility Restoration Act, focusing on restoring clarity, certainty, and predictability to the United States patent system.

2025-10-08

Summary

This hearing focused on the Patent Eligibility Restoration Act of 2025 (PARA) and the urgent need for patent eligibility reform in the United States, which legislators and witnesses believe is crucial for maintaining America's global leadership in innovation and intellectual property rights [ 00:09:37 ]

. The discussion highlighted the perceived confusion and inconsistency in current patent law, its impact on various industries, and the proposed solutions offered by PARA [ 00:10:43 ] .

Themes

Need for Patent Eligibility Reform (PARA)

The current patent eligibility law is described as confused, constricted, and unclear due to relatively recent Supreme Court decisions, leading to inconsistent lower-court decisions and uncertainty in innovation and investment [ 00:10:43 ]

. This has notably decreased investment in biotechnology and computer-implemented inventions, pushing capital overseas [ 00:11:15 ] . All twelve sitting judges of the U.S. Court of Appeals for the Federal Circuit Court had, by 2021, lamented the state of the current law [ 00:11:18 ] . PARA aims to restore predictable patent eligibility by replacing broad judicial exceptions with five specific statutory exclusions, creating a solid foundation for America's innovation future [ 00:12:34 ] . Former USPTO Directors Andrei Iancu and David Kappos emphasized the urgent need for congressional action to resolve this uncertainty, which they argue diminishes America's competitive edge and pushes innovation to other countries .

Concerns about PARA's Impact

Opponents of PARA argued that the bill would reverse the progress made by the Supreme Court's Alice decision, potentially allowing a return to vague, abstract patents that could lead to increased litigation from patent trolls . They recalled past instances where companies faced lawsuits over common business practices, such as online shopping carts or email receipts, simply because they were "done on a computer" or "with AI" . While proponents acknowledge past issues with low-quality patents, they argue that PARA explicitly addresses such concerns by excluding rote computer or AI applications . They also contend that issues of patent quality should be addressed by other sections of the Patent Act, rather than by Section 101 eligibility .

International Competitiveness (China)

The U.S. patent system's current state was contrasted with China's, which has reportedly broadened and clarified its patent laws, leading to a surge in filings and investment . While U.S. AI patent filings have remained stagnant, China's have tripled in recent years . This divergence, it was argued, poses a national security risk, as the U.S. could lose its competitive advantage in critical emerging technologies, potentially leading to investment and jobs migrating overseas . China views intellectual property as strategically important and aggressively improves its system in its own national interest .

Distinction between Eligibility and Patentability

A core argument by PARA supporters is that patent eligibility (Section 101) should serve as a broad, initial filter to determine what types of inventions are generally amenable to patent protection . The more rigorous criteria for patentability, such as novelty (Section 102), non-obviousness (Section 103), and clarity/disclosure (Section 112), should then determine whether a specific invention merits a patent . Critics argue that courts have conflated these concepts, using Section 101 to invalidate patents that might otherwise meet quality standards, creating confusion . PARA aims to restore Section 101 to its limited threshold role, ensuring that eligibility is not used as a gatekeeper to exclude broad categories of innovation .

Impact on Life Sciences and Diagnostics

The current legal framework has made it challenging to patent medical diagnostic tests based on biological markers, leading to an "eligibility crisis" where life-saving innovations in diagnostics and gene-based therapies may not be developed or commercialized . The Regenexx Bio v. Sarepta case highlighted concerns that even genetically engineered cells could be deemed ineligible, threatening the biotechnology industry . Opponents countered that PARA could lead to the privatization of medical knowledge, such as biomarkers, potentially hindering patient access and comprehensive genetic analysis . They also raised concerns about unaffordable test prices, citing the BRCA1/2 gene patents [ 01:58:31 ]

. Proponents argued that pricing is a separate issue from patent eligibility and that denying patents risks valuable diagnostics never being created [ 01:05:42 ] . There was also debate over PARA's exclusions for human genes, with some arguing they are largely superficial, while others believe they codify important distinctions made by previous Supreme Court decisions .

Tone of the Meeting

The meeting conveyed a serious and at times contentious tone, reflecting the high stakes and diverse perspectives on patent eligibility reform . There was clear bipartisan support for addressing the issue, with Chairman Tillis and Senator Coons highlighting their long-standing collaboration . However, witnesses from different sectors presented strong, often opposing, views regarding the impact of current law and the potential consequences of PARA on their respective industries . Despite these disagreements, there was a shared acknowledgment among many participants about the need for greater clarity in patent law, with several emphasizing that Congress, not the courts, must provide a legislative solution .

Participants

Transcript

Thom Tillis

This hearing will come to order. Just for housekeeping, before I do my opening statement, we are gonna have votes beginning at, I believe, somewhere between now and 2.45. I've instructed the cloakroom, unless my vote is needed, to break a tie that I don't intend to recess the hearing so we'll charge through but if I have to leave it is in fact because I need to break a tie. Don't anticipate that and I know that you all put a lot of work into this preparation and I want to show you the utmost respect of not having your testimony in these discussions to be interrupted. Today we discuss a topic that I think in my time here has been often confused and mischaracterized and I actually believe it's one of the most important issues facing our country today, I should say, in the patent community. It's the topic of patent eligibility reform. The long overdue need for patent eligibility reform is one that, if left unaddressed, will cede America's, I believe, cede America's well-earned title of the global innovation leader and global intellectual property rights leader to other communities. Can't let that happen. And under my watch, which incidentally is over the next 452 days, it will be one of my top priorities in my office. The sad part about the potential loss of our, what I believe, championship status in the IP and intellectual property protection community is foreign governments like the CCP are actively working to undermine our IP system. And they're attempting to overtake America's position as the global IP leader, as I said before. There are those in this country who, rather than fix the problem, would like to take advantage of ambiguity or the comfort with the status quo that's been created because of the confusing and I think sometimes conflicting outcomes in our courts.

Thom Tillis

Now, we have four relatively recent Supreme Court decisions that have caused patent eligibility law in the U.S. to be confused, constricted, and unclear. That's what we're trying to fix here, folks. It's led to inconsistent lower-cart decisions, uncertainty in innovation, uncertainty in investment communities, and unpredictable business outcomes, all things that, if you know me, I don't like. Research has confirmed that under the expanded judicial exceptions, U.S. inventors are unable to obtain patents in areas where economic peers offer protections. This is particularly concerning in the economically critical areas of biotechnology and computer implemented invention where patent restrictions decrease investment and send capital overseas. As of 2021, all 12 then sitting judges of the US Court of Appeals of the Federal Circuit Court lamented the state of the current law. I've always said that we should not rush to legislate and that we should let courts do their job until they don't. And that's where we are now. Case in point, in 2021, I worked with former USPTO Director David Kapos, who we'll hear from today, and retired Judge Paul Michel to file an amicus brief in the American Axle case. I was disappointed to see the Supreme Court decline the opportunity to offer clarity on patent eligibility. So we still have a lot of work ahead of us. And while former USPTO Director Iancu, Andre Iancu, who also we'll hear from today, made great strides with the 2019 PEG, the Revised Patent Eligibility Matter Eligibility Guidance, it changed how patent examiners review patents, but the guidance is not binding on the courts, and when patents are challenged in litigation, the guidance lacks the force and effect of law.

Thom Tillis

That's why I've introduced the Patent Eligibility Restoration Act of 2025, or PARA, along with Senator Coons. Earlier this year, I was happy to see Senators Blackburn and Senators Hirono join as co-sponsors. PARA preserves the first part of the current eligibility statute, but it eliminates an overly broad set of three current judicial exceptions, replacing them with five specific defined statutory exclusions. By eliminating and replacing the current judicial exceptions, PARA provides predictable patent eligibility for important computer-implemented technology developments and medical advances, creating a solid background for America's innovation future. It's important to note that patent eligibility and patentability are often conflated. This is a tool that opponents to patent eligibility reform I think often leverage to sow confusion and paint the narrative that expanding patent eligibility will equate to rampant and uncontrolled patentability. I disagree. Section 101 was not intended to function as a gatekeeper to keep out ineligible patent claims. Patent eligibility is simply one step in the process of determining patentability. Should a patent examiner find a claimed invention fails to meet one or more of the requirements outlined under Sections 101, 102, 103, and 112, a patent will not be issued. Simply meeting the requirements of Section 101 does not mean that a patent will be granted. I will remain a champion for strong, reliable, and predictable intellectual property rights and for inventors and creators, large and small. And as part of that promise, I will not stop shining spotlight on the need for patent eligibility reform. I'm also heartened to say that our current USPTO director, John, our current USPTO director, John Squires, shares this understanding and that we need patent eligibility reform and that the status quo is not sufficient.

Thom Tillis

This is no more evidence than by his ceremonial signing of two patents last month on technology generally considered not to be eligible under Section 101. I hope that this is our last IP subcommittee hearing on this topic and that we will soon move to PARA and a markup in this Congress. I will be entering my opening, well, I've already stated all my opening comments. I want to give Adam, Senator Schiff, an opportunity to make opening comments, and then we'll also hear from Senator Coons. Senator Schiff.

Adam B. Schiff

Chairman Tillis, thank you for bringing us together for this important hearing on patent eligibility. As I do not have a Tillis rule, and as I am a freshman, I will be running off to vote.

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